Correlation Between Major Drilling and GALENA MINING
Can any of the company-specific risk be diversified away by investing in both Major Drilling and GALENA MINING at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Major Drilling and GALENA MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Major Drilling Group and GALENA MINING LTD, you can compare the effects of market volatilities on Major Drilling and GALENA MINING and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Major Drilling with a short position of GALENA MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Major Drilling and GALENA MINING.
Diversification Opportunities for Major Drilling and GALENA MINING
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Major and GALENA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Major Drilling Group and GALENA MINING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GALENA MINING LTD and Major Drilling is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Major Drilling Group are associated (or correlated) with GALENA MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GALENA MINING LTD has no effect on the direction of Major Drilling i.e., Major Drilling and GALENA MINING go up and down completely randomly.
Pair Corralation between Major Drilling and GALENA MINING
Assuming the 90 days horizon Major Drilling is expected to generate 5.02 times less return on investment than GALENA MINING. But when comparing it to its historical volatility, Major Drilling Group is 2.91 times less risky than GALENA MINING. It trades about 0.0 of its potential returns per unit of risk. GALENA MINING LTD is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 6.00 in GALENA MINING LTD on August 31, 2024 and sell it today you would lose (2.95) from holding GALENA MINING LTD or give up 49.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Major Drilling Group vs. GALENA MINING LTD
Performance |
| Timeline |
| Major Drilling Group |
| GALENA MINING LTD |
Major Drilling and GALENA MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Major Drilling and GALENA MINING
The main advantage of trading using opposite Major Drilling and GALENA MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Major Drilling position performs unexpectedly, GALENA MINING can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GALENA MINING will offset losses from the drop in GALENA MINING's long position.| Major Drilling vs. BHP Group Limited | Major Drilling vs. Rio Tinto Group | Major Drilling vs. Rio Tinto Group | Major Drilling vs. Vale SA |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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